Based on tight credit conditions, the Federal Housing Administration has been expanding its programs but tightening its guidelines. Traditional FHA Loan Applications continue to flood inbefore guidelines tighten further.

We have seen a noticable increase in lender requested FHA Appraisals here in Temecula, Riverside County and we have heard the same from our affiliates all over Southern California that they are seeing increased FHA loan activity also.

Programs & Guidelines

In the mortgage industry lenders have “Programs” and those programs have “guidelines”. As you may or may not be aware there is not “one size fits all” loans when you purchase a home or refinance. Some programs allow up 100% LTV (loan to value ratio, others only allow 80%. Some programs require at least a 640 FICO score, others will accept as low as a 500. Another common restriction is the maximum loan amount. Some programs allow up to $1,000,000, others only allow up to the current “conforming” loan limit at the time. Those are examples of “programs” and some guidelines.

Guidelines are restrictions the lender (or in some cases their investor) places on the portfolio so that all the loans are similar for that program. An example of guidelines might be: All borrowers must have no more than 1 x 30 on any previous mortgages. Another might be that the borrower must have 3 months “reserves” or basically that they have the new mortgage payment 3 times over in verified cash available at the time of closing. LTV is also the most common and important guideline factor.

HERE’S WHY FHA IS SO POPULAR:.

Up to 97.5% Financing
No Pre-Payment Penalty
Fair Credit is NOT a problem
Re-FI, Cash-out, or Purchase
30 Year Fixed at Low Rates

Lenders love FHA loans because in many cases they are able to make loans for 1st time home buyers. It’s very rewarding to be the person responsible for helping a young couple or low income family buy their first home using an FHA loan.

If you are buying a home or need to refinance your existing loan ask your lender about FHA and tell them Valu-Rite Appraisers Inc. sent you. We have FHA approved appraisers here in Temecula, Riverside County and standing by nationally. We also have one of the quickest turn times in the industry!